The Merchandise Export from India Scheme (MEIS Scheme) is a newly launched scheme launched as a part of the new Foreign Trade Policy and is applicable from 2015 to 2020. This new scheme replaces the 5 similar incentive schemes available earlier under Foreign Trade Policy 2014-2019 and rationalises the incentives given under these schemes. Under the MEIS Scheme – the Govt has allocated more than 22,000 crore per annum for exports. The following are the 5 Schemes which have now been replaced by the MEIS Scheme:-
- Focus Product Scheme (FPS)
- Market Linked Focus Product Scheme (MLFPS)
- Focus Market Scheme (FMS)
- Agriculture Infrastructure Incentive Scrip (AIIS)
- Vishesh Krishi Gramin Upaj Yojana (VKGUY)
The new Foreign Trade Policy for 2015-2020 has not only revamped the incentives and rewards for Merchandise Exporters but also for Service Exporters through the SEIS Scheme. In this article, we would mainly be discussing the benefits to exporters under the MEIS Scheme. For benefits to service exporters under the SEIS Scheme, kindly refer this article – 5% Incentives by Govt to Service Exporters under SEIS Scheme
Merchandise Export from India Scheme (MEIS)
Under the MEIS Scheme, certain rewards and incentives are given to exporters. Such incentives are given to exporters at a specified rate which varies from product to product and from country to country.
The incentives are given at a specified rate on the FoB value and would be on the lower of the following:-
- Realised FOB value of exports in free foreign exchange, or
- The FoB value of exports as given in the Shipping Bill in free foreign exchange, whichever is less,
The incentives and rewards given under this scheme vary from Product to Product and from Country to Country. The countries for which the incentives are allowed are divided into 3 categories namely:-
- Category A: Traditional Markets (30) – European Union (28), USA, Canada
- Category B: Emerging & Focus Markets (139) – Africa (55), Latin America & Mexico (45), CIS Countries (12), Turkey & Western Asian Countries(13), ASEAN Countries (10), Japan, South Korea, China, Taiwan
- Category C – Other Markets (70)
The percentage of rewards varies from product to product and are in the range of 2% to 5% for most items. The detailed list of rewards on each product export has been mentioned in this file – Rate of Rewards under MEIS Scheme for Exporters.
Duty Credit Scrips issued under MEIS Scheme
The incentives awarded to exporters under this scheme are issued in the form of Duty Credit Scrips. These Duty Credit Scrips are freely transferable and can be used for the payment of
- Excise Duty
- Customs Duty
- Service Tax
In case the holder of such Duty Credit Scrips wishes to sell these scrips, he can easily sell them to anyone as these scrips are freely transferable. To understand more about Duty Credit Scrips, you may refer the following article:-
Last Date for filing application for Duty Credit Scrips
Application for obtaining Duty Credit Scrips under MEIS shall be filed within a period of:-
- 12 months from the Let Export Order (LEO) date, or
- 3 months from the date of:
- Uploading of EDI Shipping Bills onto the DGFT Server by Customs
- Printing/ Release of Shipping Bills for Non-EDI Shipping Bills (whichever is later)
Validity Period and Revalidation of Scrips
- Duty Credit Scrip to be valid for a period of 18 months from the date of issue and must be valid on the date on the date on which actual debit of duty is made.
- Revalidation of Duty Credit Scrip shall not be permitted unless the validity has expired while in the custody of Customs Authority/ RA.
Facility for Splitting of Scrips
- Duty Credit Scrips shall be issued on request subject to a minimum of Rs. 5 Lakh each and multiples thereof may also be issued at the time of application.
- In case of EDI enabled ports = Split certificates shall be permitted with the same port of Registration as appearing on the original scrip after issuance.
- In case of export through non-EDI Ports – Facility of split not allowed after issue of Scrip.
The following video prepared by the DGFT outlines the benefits given by the Govt to various exporters
Commodities for which such Incentives under MEIS are awarded
The commodities for which such incentives under the MEIS Scheme are awarded are classified into various different product groups based on the following:-
- Highest Rewards for Agricultural and Village industry products; Value added and packages products; Eco-friendly and green products; Labour Intensive Products and Products with large no. of producers and/or exporters, Industrial Products from potential winning sectors and Hi-tech products
- First time support provided for export of Fruits, Vegetables, Dairy Products, Oil Meals, Ayush & Herbal Products, Paper, Paper Board Products.
- Global support provided to Fruits, Flowers, Vegetables, Tea, Coffee, Spices; Cereals Preparation, Shellac, Essential Oils, Processed Foods, Eco Friendly Products that add value to waste; Marine Products; Handloom, Coir, Jute Products and Technical Textiles, Carpets Handmade; Other Textiles and Readymade Garments supported in the market in the European Union, USA, Canada and Japan; Handicraft, Sports Goods and Furniture, wood articles;
- Support to major markets given to Pharmaceuticals, Herbals, Surgicals; Industrial Machinery, IC Engine, Machine Tools, Parts, Auto Components/ Parts; Hand Tools, Pumps of all types; automobiles, two-wheelers, bicycles, ships, planes, chemicals, plastics, rubber, ceramic and glass, Leather Garments, Saddlery Items, Footwear, Steel Furniture, Prefabs, Lighters, Wood, Paper, Stationary; Iron, Steel and Base Metals, Products
Procedure for filing Application under MEIS Scheme
- Application for claiming incentives under the MEIS Scheme shall be filed online in the specified format i.e. ANF-3A using Digital Signature.
- The application for export of goods shall be filed with the concerned Regional Authority of DGFT on DGFT Website.
- Separate application shall be filed for each port of export.
- An application can be filed with upto a maximum of 50 shipping bills
- In case of exports through the EDI Port – the hard copy of the application, shipping bill, e-BRC and RCMC are not required to be submitted. However, the proof of landing is required to be submitted.
- Relevant EDI shipping bill and e-BRC to be linked with the online application.
- In case of exports through non EDI-port, the hard copy of the export promotion copy of non-EDI shipping bills and proof of landing in the prescribed manner is required to be submitted. But the hard copies of applications to DGFT, electronic bank realisation certificate (e-BRC) and RCMC is not required to be submitted. Scanned copies of any other prescribed documents for claiming scrip are required to be submitted.
- The documents which are not required to be submitted (in original), are required to be retained by the applicant for a period of 3 years from the date of issuance of scrip. The licensing authority may call for such documents in original at any time within 3 years.
- In case of failure to submit the original documents when demanded by the licensing authority, the rewards granted are required to be refunded along with interest.
- No manual feeding is allowed for EDI Shipments to the applicants in the online system.
- “Let Export Date” to be taken as the relevant date for determination of eligibility of product, corresponding ITC (HS) code, and markets for claiming rewards under MEIS.
The above procedure is to be followed for claiming incentives under the MEIS Scheme in all cases except in case of export of goods through e-commerce. The procedure for claiming incentives for export through e-commerce has been discussed below.
Procedure for claiming Incentives under MEIS for Export through e-commerce
In case of export of goods through courier or foreign post office using e-commerce, incentives under this scheme are awarded for FOB Value upto Rs. 25,000 per consignment. In case the FOB Value is more than Rs. 25,000, the rewards are limited on value limited to Rs. 25,000 only.
The following procedure is to be followed for claiming incentives under the MEIS Scheme for export of Goods through Courier or Foreign Post Office using e-commerce:-
- Application to be filed online using Digital Signature in Form ANF-3D
- For proof of landing, the exporter may submit express operator landing certificate/ online web tracking print out indicating airway bill no.
- Separate application to be filed for each port of export
- The submitted documents shall be examined manually by the RA before grant of scrip.
Determination of Jurisdictional Officer of DGFT
- The applicant shall have the option to choose the Jurisdictional RA on the basis of Corporate Office/ Registered Office/ Head Office/ Branch Office address endorsed on the IEC for submitting the application.
- Option need to be exercised at the beginning of the financial year
- Once an option is exercised, no change would be allowed for claims relating to that year.
Port of Registration under MEIS Scheme
- Duty Credit Scrip under MEIS shall be issued with a single port of registration which shall be the port of export.
- Duty Credit Scrip needs to be registered at the port of exports prior to usage of duty credit.
- Once registered at the EDI port, scrip to be automatically used at any EDI Port for Import and at any manual port under Telegraphic Release Advice (TRA) procedure.
- In case of port of registration is a manual port, TRA required for imports at any other port.
Re-export of Defective/ Unfit Goods
- Goods exported which are found defective or unfit for use, may be re-exported, as per DoR guidelines.
- In case the Duty Credit Scrip has been used for Imports, the Customs shall issue a certificate containing the particulars of scrips used, date of import of re-exported goods and the amount debited while importing such goods.
- Based on this certificate, upon application, a fresh scrip shall be issued by concerned RA to the extent of 98% of debited amount, with the same port of registration and valid for a period equivalent to balance period available on date of import of the defective/ unfit goods.
Risk Management System for checking Authenticity
A Risk Management system is in operation whereby every month the Computer System in DGFT office, on random basis, selects 10% of cases for each RA where scrips have already been issued, under each RA Scheme. RA in turn may call for original documents in all such selected cases for further examination in detail.
In case any discrepancy and/or over claim is found on such examination, the applicant shall be under obligation to rectify such discrepancy and/or refund over claim in cash with interest. The original holder of scrip, however, may refund such over claim by surrendering the same scrip whether partially issued or fully unutilised, without interest.
The Regional Authority may also ask for original proof of landing certificate, annexures attached to ANF’s or any other document, which has been uploaded digitally at any time within 3 years from the date of issue of scrip.
Failure to submit such documents in original would make the applicant liable to refund the rewards granted with interest. It would be the responsibility of the applicant to maintain such documents, certificate etc. for a period of atleast 3 years from the date of issuance of scrips.
Other Salient Features of MEIS Scheme
- FOB Value means the price of goods at the time of loading at the domestic port and do not include loading, shipment and insurance costs.
- SEZ units and EOU/ STP/ BTP/ EHTP units not availing Direct Tax Exemption also are also eligible to claim benefit under this scheme.
- There is no conditionality attached to these Duty Credit Scrips.
- The exporter shall mention the following declaration on all categories of Shipping Bills in order to be eligible for claiming rewards under MEIS – “We intent to claim rewards under Merchandise Exports from India Scheme (MEIS)”
- The Free foreign exchange earned through International Credit Cards and other Instruments as permitted by RBI shall also be taken into account for computation of value of exports.
- The requirement of submission of landing certificate has been removed vide public notice 6-2015-2020 dated 4th May 2016.
- All the Forms and there procedures for filing application for claim of incentives under MEIS Scheme have been mentioned in this file – Detailed Guide on MEIS Scheme.